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Tuesday, 13 April 2021 01:32

4 Reasons Politics is a Bad Idea for CEOs

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flagI believe that CEOs should not be vocal on political issues. I think it is wrong for executives to take a position, for the whole business, on public-policy questions that don’t directly affect them.

First, while these CEOs have the right to their own opinions, they can never speak merely as individuals; they always speak for and represent the companies they head. As CEOs they have the right, and perhaps the obligation, to speak out on matters affecting their organizations, but unless they have asked their boards for approval before speaking, they don’t have that right on unrelated matters.

Second, inevitably their announcements on purely political issues will alienate many of their employees and customers. Those positions will always lead to unintended consequences. In the Georgia situation, it immediately prompted Major League Baseball to move the All-Star Game to Denver, which then brought on charges of hypocrisy because of baseball’s close ties to two dictatorships—Cuba and China. It also generated calls to boycott two major Atlanta-based companies. This won’t be the end of the backlash.

Third, these and other executives will be pressured in the future to comment, pro or con, on other states’ voting laws. That will lead to further charges of hypocrisy, more boycotts, more publicity, more ill will. At the end of the day corporations and the idea of capitalism will be in lower repute.

Fourth, and perhaps most important, there is no limiting principle to this problem. If business heads can be pressured to comment on issues unrelated to their businesses, they will be compelled to weigh in on more current events and issues and will have no basis for refusing to respond. What do you think of catch and release at the border, what do you think of no-bail laws in New York? It will go on and on.

 

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